A M E R A L C O P U B L I C AT I O N | O C T O B E R 2 0 1 6

HERE TO STAY

IT’S MORE FUN FOR FAMILIES

IS THE NEW ADMINISTRATION A GOOD INVESTMENT?

CLASSROOMSIN THE CLOUDS

BACK IN POWER

International hotels are making the Philippines

their destination of choice

A youthful population fuels an appetite forfamily entertainment

Foreign businesses take stock of President Duterte’s economic direction

Angelo Valencia builds schoolrooms

in the hinterlands

MGen’s new power plant returns Meralco to the

business of generating power

BERND SCHNEIDER

General Manager

Novotel Manila Araneta Center

COVER STORY

2

MERALCO POWERCLUB

LET’S TALK NUMBERS

SPACE TO PLAY, ROOM TO LEARN

ALFREDO S. PANLILIO

Senior Vice President and Head,Customer Retail Services andCorporate Communications

VICTOR S. GENUINO

Vice President and Head,Corporate Business Group

MESSAGE

I always appreciate pas mes that spark

my children’s imagina on and provide

me with opportuni es to bond with

them. But I want ac vi es where I need

not worry about my kids being exposed

to violent or age-inappropriate content.

It’s reassuring that there are

op ons that combine fun with learning

and development: the science-oriented

Mind Museum, the imagina ve

DreamPlay, the exci ng rides of

Enchanted Kingdom, and the historic

Na onal Museum.

Entrance to the Na onal Museum

is free, but this is not the case for other

a rac ons. That many Filipinos can

aff ord premium recrea on facili es

refl ects the economic growth the

country enjoys. This boom has lured

foreign brands, including Novotel,

Conrad and Shangri-la, to build and

expand. It is also why Swedish Match

Philippines Inc. chose this country

to produce the millions of Cricket

disposable lighters sold around the

world.

Indeed, the Philippines’s vibrant

economy makes it very a rac ve

to foreign investors, and President

Duterte promises to improve on it

by changing laws that currently limit

foreign direct investments. However,

his administra on must also maintain

consistent, predictable policies to

reassure long-term investors.

Keeping the economy humming,

however, requires a well-educated

workforce to keep businesses

compe ve and innova ve. This

requires par cipa on from all

stakeholders, which is why business

execu ves like lawyer Angelo Valencia

and our very own Chairman Manuel

V. Pangilinan step in to work with

communi es in remote loca ons,

helping build classrooms and electrify

schools.

Such eff orts empower children

in these areas to aspire beyond the

confi nes of their birthplaces and play a

signifi cant role in the country’s progress

for genera ons to come.

Tourism remains one of our most

under-appreciated growth

sectors. As a country and as a

people, we have so much to off er to the

rest of the world, but the absence of

infrastructure – airports, roads, quality

accommoda ons and so on – hampers

the growth of tourism. So does the

lack of alignment in the long-term

goals of the Tourism, Public Works

and Highways, and Transporta on

departments.

Only in recent years have these

agencies begun coordina ng their

ac vi es, resul ng in the rising number

of foreign tourists, reaching 5.4 million

in 2015. That pales in comparison,

however, to the 30 million recorded

by Thailand for the same year. Imagine

what those numbers can do for the

Philippines!

To help elevate this vital industry,

Meralco works closely with government

and private-sector stakeholders, as

well as foreign investors. In par cular,

we clarify the power cost structure to

would-be investors, vis-à-vis that of

our regional neighbors. Aside from

explaining the Philippine energy industry,

we off er integrated energy services that

we and our subsidiaries provide.

Fine-tuning our services to be er

suit a par cular problem becomes

much easier, however, when we have a

keen understanding of our customers’

challenges. This is why we we ins tuted

regular dialogues with our customers

through our Power Up Forum series.

Our most recent Forum focused on

fi nance issues, like the applicability of

the expanded value-added tax and the

expanded withholding tax on power

payments.

By encouraging more open

exchanges with our customers, we hope

to improve on our role as a partner in

business and a contributor to na onal

growth.

10

Analysis

BUSINESS UNDER A NEW

ADMINISTRATIONForeign banks, credit rating agencies,and chambers of commerce weigh in onthe economy under Duterte.

CEO Corner

CLASSROOMS OF HOPE, NORTH TO SOUTH Discover Angelo Valencia’s long road fromthe boardroom back to the schoolroom.

Company Profile

LIGHT IT UP!Swedish Match Philippines dominates

the world of disposable lighters.

Subsidiary Profile

A LONG PATH

TO POWER MGen strives to bringa new power plant on-line.

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Company Profile

A PEOPLE’S TREASURESFrom fine art to historical artifacts, the NationalMuseum shows off the rich heritage of Filipinos.

Events

THE BEST-SHARED SECRETSCustomers and financial experts come together to discuss saving on energy costs at Meralco’s regular Power Up Finance Forum.

15Cover Story

HERE TO STAYWith tourism on the rise, more international hotels are making themselves at home here.

Industry Trends

MORE FUN FOR EVERYONE Family entertainment takes on new thrills with better learning and leisure options.

One Meralco Foundation

SOLAR POWER, SCHOOL KITS

AND STUDENT LAMPSOMF gives schools and students in remote areas the power to learn.

28

INSIDE A M E R A L C O P U B L I C A T I O N

MERALCO POWER CLUB MAGAZINE

VOLUME 6 ISSUE 3

PUBLISHER: SUMMIT MEDIA

A joint project with Meralco’s Corporate

Business Group, Marke ng, Customer

Solu ons and Product Development,

Corporate Communica ons. Published four

mes a year for key offi cers of Meralco

corporate accounts.

CONTRIBUTORS

Arlene Adto, Ocs Alvarez, Esmi Barrera,

Acrit Carlos, Jing Lejano, Cai Ordinario,

Jun Pinzon, Cherrie Regalado, Malou Rosal,

Mari-An C. Santos, Fennie Tan, Coni Tejada

MERALCO EDITORIAL ADVISERS

CUSTOMER RETAIL SERVICES

Alfredo S. Panlilo

CORPORATE BUSINESS GROUP

Victor S. Genuino

Geralyn A. Solidum

Elenette M. Uy

MARKETING, CUSTOMER SOLUTIONS

AND PRODUCT DEVELOPMENT

Jose Antonio T. Valdez

Edeliza T. Lim

Nina V. Posadas

Quinnie G. Blanco

Precious K. Almendras

Ness G. Ramos

EDITORIAL TEAM

EDNA T. BELLEZA Publisher

MA. STELLA F. ARNALDO Editor-in-Chief

DONDI LIMGENCO Creative Director/

Associate Editor

ALDELM FERRIOLS Art Director

ESMI BARRERA Copy Editor

JOEY ANCIANO Project Manager

VINCE D. SERRANO Production Artist

BUBBLES SALVADOR Editorial Assistant

Meralco, Ortigas Avenue, Pasig City

Telephone: (632) 632-8771

Fax: (632) 632-8771

www.meralco.com.ph

We welcome comments and suggestions.

Please send them to:

meralcopowerclub@meralco.com.ph

4

MERALCO POWERCLUB

ANALYSIS

BY CHERRIE REGALADO

Foreign investors are raising their expectations, five months into Rodrigo R. Duterte’s presidency.

Business Under a New Administration

The Philippines posts one of the highest economic growth rates in Asia, with a 6.3-percent average gross

domes c product (GDP) growth from 2010 to 2015. In the fi rst half of 2016, the domes c economy expanded by

6.9 percent, making it among the fastest-growing emerging economies in the region, second only to India with

its 7.5-percent growth rate in the period.

The Philippines also ranks eighth among the most

a rac ve des na ons for foreign investments for 2016

to 2018, according to the World Investment Report

2016 by the World United Na ons Conference of Trade

and Development (Unctad) released in June.

Can the country sustain its economic growth and bring in

more foreign investments, given the recent change of

administra on?

A laundry list of reformsPresident Rodrigo Roa Duterte was elected as the 16th

Philippine president by more than 16.6 million voters.

Outspoken and prone to using exple ves in speeches and

media appearances, the former Davao City mayor campaigned

to fi x the peace and order situa on, eliminate illegal drugs,

and eradicate government corrup on.

In an unprecedented move, he met with businessmen

before assuming offi ce, to present his administra on’s

10-point economic agenda. He vowed to maintain the

macroeconomic policies of the Aquino administra on, reform

the tax structure, increase infrastructure spending, and

improve compe veness and ease of doing business in the

country.

Despite Unctad’s recogni on of its foreign-investments

appeal, the Philippines s ll has a long way to go to acquire

more foreign direct investments (FDI). The Bangko Sentral ng

Pilipinas recorded some US$5.84 billion in net FDI in 2015, up

1.74 percent from 2014’s infl ows.

Increasing foreign ownershipIn its report on the Asia-Pacifi c region, the Organiza on

for Economic Coopera on and Development (OECD) notes

the Philippines has one of the most restric ve FDI regimes,

compared to OECD and non-OECD countries. It stresses that

cons tu onal provisions, limi ng foreign ownership to 40 per-

cent in key industries and land ownership, remain a signifi cant

obstacle to a rac ng more foreign investors.

Japanese Chamber of Commerce and Industry of the Philip-

pines President Yoshio Amano shares that Japanese investors

consider foreign ownership restric ons a disincen ve from PH

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5

OCTOBER 2016

pu ng their money here.

Japan was the Philippines’s second biggest source of

foreign investments, sinking in some US$394 million in 2015.

However, Amano points out that the country only receives a

tenth of Japanese investments poured into neighboring Asso-

cia on of Southeast Asian Na ons (Asean) countries, par cu-

larly Indonesia, Thailand and Vietnam.

The situa on is the same for most foreign investors. In the

Asean region, the Philippines ranked sixth in terms of net FDI

in 2015, a er Singapore (US$61.3 billion), Indonesia (US$16.1

billion), Vietnam (US$11.8 billion), Malaysia (US$11.3 bil-

lion), and Thailand (US$8.1 billion), according to data from the

regional organiza on’s web site.

Economist Joseph Incalcaterra of HSBC thinks the

Philippines must do what it can to a ract more FDI, which

could mean li ing Cons tu onal limits on investments by

foreigners in certain industries. “Foreign direct investment in

u li es is popular across the region, and there is scope for

increased investment in the sector. Given the importance of

lowering electricity costs in order to make Philippine manu-

facturing more compe ve, we think the government should

accelerate plans to a ract foreign investment in this sector.”

As things stand, power genera on accounts for 50 percent

of the total cost of electricity. Allowing more foreign invest-

ment into the energy sector will increase the energy supply

and eff ect a more compe ve energy market.

Duterte has said he favors a cons tu onal amendment to

raise the foreign ownership of local businesses to 50

percent. This also entails gran ng businesses greater scope

for land ownership. Charter change will require a cons tuent

assembly or a cons tu onal conven on, but Amano consid-

ers the sen ment a welcome development. “It means a be er

environment for investors,” he adds. “We believe he is working

towards that direc on and that’s why we have big expecta-

ons.”

The European Chamber of Commerce of the Philippines

(ECCP) has its reserva ons. “We are aware that land owner-

ship for foreigners remains an emo onal issue,” admits Henry

Schumacher, ECCP senior advocacy adviser. “In our view, it is

unlikely that foreign ownership of land will be li ed

uncondi onally.”

Tax reform on the tableTo further a ract FDIs, Incalcaterra also favors revising the

corporate tax structure. “Corporate tax rates in the Philippines

are among the highest in the region, which puts the country at

a compe ve disadvantage. Fortunately, the new government

is planning to address both issues, and a comprehensive tax

reform is currently being dra ed.”

The new administra on proposes a comprehensive tax

reform program to reduce corporate income tax rate from 30

percent to 25 percent, and the maximum personal income tax

rate from 32 percent to 25 percent. For an addi onal P412

billion in revenues, it also aims to expand the value-added tax

base, increase excise taxes, and ra onalize fi scal incen ves

handed out to investors to off set tax cuts amoun ng to P174

billion. The government wants both tax reforms to be passed

into law next year.

Both upper and lower houses of Congress favor the cuts in

personal and corporate taxes, but Schumacher cau ons that

the ra onaliza on of fi scal incen ves might somewhat weaken

the country’s appeal as an investment site.

“Changes in tax incen ves will have to be done carefully,”

he notes. “Investors expect these tax incen ves, given the

higher cost of doing business in the Philippines compared to

compe ng countries in the region.”

Incalcaterra agrees. “Tax reform in the Philippines is

important, but it must be coupled with eff orts to increase tax

compliance; this way, the revenue base can grow with the

economy. Foreign investors are generally sensi ve to tax

policy, and it makes sense to maintain tax holidays.”

Infrastructure and energyAmano and Schumacher concur that the signifi cant

expansion of infrastructure such as roads, port facili es, tele-

communica ons networks, and airports are needed to bring in

more FDIs.

An Asean Perspec ves report released by HSBC Global

Research concludes that increased infrastructure spending is

key to sustained growth. The report recommends “the not-so-

scien fi c rule of thumb,” for countries such as the

Yoshio AmanoPresident Japanese Chamber of Commerce and Industry of the Philippines

‘We believe [President Duterte

is working towards] a be er

environment for investors;

we have big expecta ons.’

Henry SchumacherSenior Advocacy AdviserEuropean Chamber of Commerce of the Philippines

6

MERALCO POWERCLUB

ANALYSIS

Philippines to spend at least 5 percent of GDP on

infrastructure.

It’s a rule Budget Secretary Benjamin Diokno seems keen to

follow, having increased infrastructure spending to 5.2 percent

of GDP in the proposed 2017 na onal government budget

now pending congressional approval. Over the long term, the

HSBC report says the Philippines should spend about US$376

billion (P17.88 trillion) on infrastructure un l 2030.

There are other carrots to dangle for the government to

a ract foreign investors. These include the fair applica on

of the Implemen ng Rules and Regula ons of the Philippines

Compe on Act, and the construc on of more power plants

to provide stable, aff ordable energy.

The ECCP, in par cular, advocates an energy mix that

demonstrates a greater reliance on natural gas and renewables

to greatly benefi t the country. “The Philippines is in a unique

posi on to focus on clean and green energy,” Schumacher

declares, “without necessarily incurring a substan ally higher

cost of genera on.”

Warning on the war on drugsEconomic policies aside, Amano praises the hard stance of

the President in fi gh ng criminality and the illegal drug trade.

These, along with the country’s peace and order situa on and

corrup on, are major concerns among Japanese investors.

Amano adds that such is their confi dence in the administra-

on’s policies that, in the wake of the September 2 Davao

City bombing that le 14 dead and 68 wounded, they remain

op mis c over the country’s peace and order situa on.

Even the declara on of a state of na onal emergency on

account of lawless violence in Mindanao, prompted by the

‘The Philippines is in a unique

posi on to focus on clean

and green energy.’

Davao blast, barely aff ects the sen ment of Japanese investors.

“The bombing is not uncommon and it’s going on all over the

world,” Amano explains, “but if the state of lawlessness con n-

ues, then we worry it may aff ect investments heavily.”

Premiere credit ra ng agency, Moody’s Investors Service,

echoes Amano’s sen ments. In a statement released fi ve days

a er the bombing incident, Moody’s Senior Credit Offi cer

Chris an de Guzman insists the bombing has no impact on

current economic and fi scal policies, and does not put the

country’s credit ra ng at risk. Nor will it slow down the eco-

nomic momentum of the country. The agency rates the country

as a notch above investment grade, Baa2.

However, De Guzman warns that the war on drugs could

derail the administra on’s promised economic reforms. “The

President has deployed his considerable poli cal capital in

defense of his campaign on drugs,” he observes, “and has

engaged key legislators in highly publicized disputes. If

protracted, this could detract a en on from the implementa-

on of important economic reforms.”

Another credit ra ng agency, Standard & Poor’s, warned

that the extrajudicial killings “could undermine respect for the

rule of law and human rights,” it said in a Sept. 21 press state-

ment. This was just as the Philippine stock market eked its

20th day of losses. “Combined with the president’s policy pro-

nouncements elsewhere on foreign policy and na onal security,

we believe that the stability and predictability of policymaking

has diminished somewhat.”

Joseph IncalcaterraEconomistHSBC

‘Tax reform must be coupled with

eff orts to increase tax compliance.’

7

OCTOBER 2016

And foreign investors dislike nothing

more than unpredictability.

Strained rela onshipsThe American Chamber of Commerce

of the Philippines (AmCham) echoes this

view.

It declares in its September 8 state-

ment that the killings under the an -drug

campaign, and the Davao bombing, hurt

the country’s image. With more than

2,000 accused drug users reported killed

during police opera ons in the space of

a few months, the AmCham expressed

concern that the drug war diminishes the

rule of law and spooks investors.

With the US as the country’s biggest

source of FDIs in 2015 at US$732.52

Net Foreign Direct Investments in the Philippines(in million U.S. dollars)

2013

2014

2015

million, AmCham remains watchful over

possible strains in US-Philippine rela-

ons. Duterte swore at US President

Barack Obama in a press conference

last September 6, hard on the heels of a

speech in August where he insulted the

US Ambassador, and recent pronounce-

ments that the Philippines would seek a

more independent foreign policy.

“Although statements of regret soon

followed, such words and their interna-

onal policy also create investor

concern,” the AmCham statement reads.

Op mism remainsDiploma c upsets notwithstanding,

the overall outlook for the Philippines

remains upbeat, according to the Eco-

nomics Asia report for the third quarter

of 2016 by HSBC Global Research. It

notes that Duterte’s pledge to support

the economic priori es of the outgoing

Aquino administra on, and his appoint-

ment of a solid, competent and credible

economic team, sends the right signals

to local as well as foreign investors.

Because of this and other

favorable factors such as the infrastruc-

ture commitment, HSBC revised its

2016 and 2017 GDP growth forecasts,

from 5.9 percent and 5.8 percent re-

spec vely, to 6.3 percent for both years.

It’s an indica on that the Philippines will

con nue to remain among Asia’s bright-

est performers and a magnet for further

foreign investment.

732.52

394.51 384.31

166.1582.63

-0.57

968.89

117.5141.94

33.60

168.52

41.38

-653.23

437.51

-8.89

6.00

-138.04-85.75

US

Japan

UK

China

Singapore

Hong Kong

source: Bangko Sentral ng Pilipinas

8 8989

BY ACRIT CARLOS

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8

MERALCO POWERCLUB

Angelo Valencia spreads the light of learning where it is most needed.

At a distance of about 960 kilometers from Manila, Pa kul, Sulu is almost as far south as one can get from the capital. Remote and impoverished, Pa kul is an enclave of the notorious Abu Sayyaf terror group.

CEO CORNER

Students in Sulu celebrate another completed school building.

Classrooms of Hope, North to South

This didn’t stop lawyer Angelo

Valencia from building classrooms

there in 2013 for the Tausug chil-

dren. “It’s not because I’m fearless,”

he shrugs. He trusted the community

to have his back, and do what it could to

keep him safe. He knew the stakehold-

ers – the parents, teachers, and the rest

of the community – were united in keep-

ing the kids in school.

Pa kul is one of many project sites

for Valencia’s Klasrum ng Pag-asa (Class-

rooms of Hope) advocacy, which he set

up in 2011 to build classrooms in far-

fl ung communi es. Klasrum ng Pag-asa

has so far built more than 70 classrooms,

including 14 in Benguet; two in Batan-

gas; two in Negros Oriental; six across

Palawan; one in North Cotabato; two in

Compostela Valley, and 31 in Sulu.

Changing direc onsCurrently the chief opera ng offi cer

of Mindanao Grains Processing, Inc., the

post-harvest facility of the La Filipina Uy

Gongco Group, Valencia had originally

set out on a predictable career path.

A er earning a law degree from the

Ateneo de Manila and working for a

few reputable law fi rms, he was hired in

1998 by Basic Holdings Inc., the hold-

ing fi rm of the Lucio Tan Group.

A near-fatal diving accident in

2011 changed his view of life. “In the

darkness we fi nd the strength to see

the clarity of it all,” he recalls. “While

the company gave me opportuni es...

I was no longer happy. I was looking

to do something more.” He quit his

job, and took a 14-day journey from

north to south of the country.

At a barangay on Mt. Pulag,

Luzon’s highest peak, a local fam-

ily asked him to fi nd work for their

daughter, a fresh graduate. He sug-

gested she remain at the day-care

center where she was helping out, but

off ered to help build classrooms. And

off he went on the road less traveled.

Becoming ‘Kuya Pultak’“It’s very diffi cult to build at 7,748

feet above sea level,” he recalls. “In

those days, there were no roads or

electricity” on Mt. Pulag.

His involvement was met with

suspicion, par cularly by skep cal

townsfolk repeatedly disappointed in

the failed promises of so-called “Manila

boys.”

He won over the community, ex-

plaining that he cared for the kids but

was not about to give dole-outs. He

urged the parents to work with him in

building the classrooms.

“The community must want to be

part of Klasrum ng Pag-asa,” Valencia

declares, “or we wouldn’t be there.”

His bonds with the Pulag community

earned him the aff ec onate monicker,

Kuya Pultak poses with Mt. Pulag Elementary School students.

9

OCTOBER 2016

Angelo ValenciaFounder

Klasrum ng Pag-asa

at the invita on of students whose

school was razed by a fi re in 2012.

“We asked the students of Sulu what

they wanted,” Valencia recounts.

“They said (in Filipino), ‘Kuya, we want

to graduate here because this is where

we are happy and able to study. This

is the key to our future.”

His organiza on had managed to

help build fi ve classrooms in Sulu,

but was forced to suspend its ac vi-

es a er fi gh ng broke out in 2015

between Abu Sayyaf insurgents and

government forces. Not all was lost,

however.

“Before we arrived, schools were

being burned down,” Valencia reports.

“A er we worked there, the schools

were not touched up to this point.”

He sees this as a sign that stake-

holders are commi ed to keeping their

kids in schools.

Five years since the launch of

Klasrum ng Pag-asa, Valencia claims

its success is refl ected in the students’

na onal achievement test (NAT)

results. “You just don’t build, and build,

with nothing to show for it, so we look

at the scores to see how the program

is helping.” He proudly notes that the

average NAT score of 79.91 at Mount

Pulag Elementary School is well above

the na onal average.

“We’re not just building classrooms,”

he enthuses. “It’s na on building: one

child at a me, a family each moment,

a community at large, and the country

for a life me.” (with Stella Arnaldo)

Kuya Pultak, or “bald big brother” in

Kalanguya, the local dialect.

Klasrum ng Pag-asa eventually built

15 classrooms on Pulag, complete with

computers energized by solar power.

Valencia also recognizes the need

to provide livelihood, to ensure the

townsfolk’s kids stay in school. By

addressing the community’s economic

needs, he believes, business growth

and development will follow. So

Klasrum ng Pag-asa set up a fund to

provide microfi nancing loans for Pulag

farmers, with support from generous

friends, businesses, and civil-society

organiza ons.

Scoring successesKlasrum ng Pag-asa visited Sulu

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INDUSTRY TRENDS

Keeping children, and their parents, amused and en-

tertained grows more challenging. They want more

thrills. More laughs. More “awesome.” This task

pursues the amusements and a rac ons industry.

“Children are no longer sa sfi ed with watching or seeing

live shows or fi lms,” explains Mario O. Mamon, who in 2014

became the fi rst Asian chairman of the board of the Inter-

na onal Associa on of Amusement Parks and A rac ons

(IAAPA). He is also the founding president of the Philippine

Associa on of Amusement Parks and A rac ons (PhilAAPA).

“They prefer immersion, interac vity,” he adds. “They want

to experience 4D theaters with special eff ects.” This is crucial

to capture the youth market in the Philippines.

Based on a 2014 Associa on of Southeast Asian Na ons

insight report, the Philippines, Malaysia and Indonesia rank

among the top members with a young popula on. In par cu-

lar, the Philippines’s low median age of 23 years makes its

popula on among the youngest in the world, as the demo-

graphic that drives the business of family entertainment.

Spending for fun and knowledgeSmall wonder that DreamWorks, which produces popular

animated movies like Kung Fu Panda, Shrek, How to Train Your

Dragon, and Madagascar, chose the Philippines for its fi rst

Local and foreign players chase fantasyand technology to entertain and educate.

MERALCO POWERCLUB

Screams of delight resound from a ship swinging in mid-air. Animated pa er breaks out as freshly baked

cookies roll out. Hushed wonder greets the massive replica skull of a long-dead creature.

More Fun for EveryoneBY CAI ORDINARIO

Visitors thrill to the twis ng moves of the Roller Skater

at Enchanted Kingdom.

10

OCTOBER 2016

11

interac ve play space.

DreamPlay has welcomed over

400,000 guests since its May 2015

opening, and a combina on of walk-in

clients, school children on fi eld trips,

and corporate-group visitors con nue to

fl ock here. City of Dreams, Manila also

accommodates orphans and underprivi-

leged children from charitable ins tu-

ons, as part of its Corporate Social

Responsibility program.

“Children don’t have to go to

Hollywood to have an interac ve experi-

ence with beloved characters,” Lynch

adds. “DreamWorks’s movie-inspired

interac ve play and crea vity play space

s mulates the minds and challenges the

crea vity and problem-solving skills of

children in a fun environment.”

It’s an environment for which families

are willing to pay. The Philippine Sta-

s cs Authority’s Family Income and

Expenditure Survey of 2012 shows Fili-

pinos spent some P56.6 billion on rec-

rea onal and cultural expenditure, such

as equipment and other durables, toys,

reading material, packaged holidays, and

recrea onal and cultural services. That

total excludes the P1.4 billion spent on

catered food in recrea onal and cultural

venues.

Expect this kind of spending to

increase, advises Mamon, who is also

Enchanted Kingdom Inc. chairman and

president. He admits that the entry of

foreign players such as DreamPlay and

Kidzania increases compe on within

the industry; yet it also creates a high-

end niche for this market.

At Enchanted Kingdom’s theme park

in Sta. Rosa, Laguna, the entrance fee

is P500 during weekdays and P600 for

weekends and holidays. Over at Dream-

Play, a full-day pass is P680 on week-

days and P880 on weekends.

The Mind Museum at BGC, Taguig

charges up to P750 for a full-day pass,

although public school students and

teachers can get a three-hour pass

for P190. Since it opened its doors to

the public in 2012, the museum has

welcomed almost a million guests. “It’s

Jarlath LynchSenior Vice President

for Non-Gaming Opera ons City of Dreams Manila

Enchanted Kingdom welcomed 1.7 million visitors in 2015.

Mario O. MamonChairman and President

Enchanted Kingdom

MERALCO POWERCLUB

12

INDUSTRY TRENDS

Kids, teens and adults demand immersive ac vi es that they

can tout on social media.

a sign,” Managing Director Manny Blas II affi rms.

“There is a need for informal learning places to

complement what schools off er.”

Energized entertainmentOpera ng expenses include

the cost of energy required

to keep guests safe and

comfortable, par cularly

at indoor museums and

play spaces.

DreamPlay’s

5,000-square-foot

area of mul level

facili es hosts “1,500

guests at any one

me,” a ests Lynch.

Its single biggest use of

electricity is air condi-

oning, cons tu ng up

to 50 percent of its daily

consump on.

It is equally important at

The Mind Museum, which some-

mes hosts more than 600 visitors

at a me, especially during school fi eld

trips. Blas credits the coordina on between

the Fort Bonifacio Development Corp. and the

Manila Electric Co. (Meralco) for the museum’s

stable power supply. Meralco has two substa ons

in BGC, providing facili es like The Mind Museum

with stable and reliable energy.

DreamPlay has been hooked up with Meralco

since day one, and connected to the P1.16-

billion, 115-kilovolt Pagcor-1 substa on,

at the Entertainment City of state-

owned Philippine Amusement and

Gaming Corp. “It’s nice to work with

a business partner who’s looking for a win-win solu-

on,” Lynch remarks.

Enchanted Kingdom has a maximum

daily capacity of 12,000 visitors with a

four-hour average stay. Roughly 1.7

million enjoyed the park’s rides in

2015. Its outdoor a rac ons

consume a whopping daily

average of 18,000 kilowa -

hour (kWh).

Which carnival ride uses

the most power? The Rio

Grande Rapids, equipped

with two giant pumps to

circulate water, uses up to

550 kWh daily. Anchors

Away accounts for 140

kWh, and Jungle Log Jam,

the a rac on with the high-

est ridership, consumes 105

kWh.

“Enchanted Kingdom cannot

exist without Meralco power,”

Mamon states bluntly. “Most of our

rides run on computers and PLCs (pro-

grammable logic controllers).” He appreciates

Meralco’s SMS-based power-outlook advisories,

aler ng Enchanted Kingdom to looming fl uctua ons

or interrup ons, such as those caused by electrical

storms. This allows the park to switch to generator

sets when needed. As more retail outlets and a rac-

ons are unveiled, Enchanted Kingdom’s energy

consump on will only increase.

“We are also open to alterna ve sources

of energy,” Mamon divulges. His company is

exploring solar power genera on through

Meralco, which ensures that any photovol-

An explora on of human origins at the Life Gallery.

taic installa on meets the highest standards of reliability and

safety.

More immersionAs expecta ons grow and entrance fees rise, compe on

for winning concepts also heats up. Blas sees the craving for

novelty as a natural impulse that arises from “a human need”

to keep learning and discovering something new. This pushes

The Mind Museum to constantly change exhibits and add

new experiences, such as one-of-a-kind overnight mys-

tery and adventure ac vi es for families and groups of

friends to solve.

Mamon insists local players must implement bold-

er, more crea ve concepts, as today’s park visitors

are less pa ent than when Enchanted Kingdom fi rst

opened in 1995. Kids, teens, and adults demand

immersive ac vi es, and discuss their experiences

on social media. He says the park uses Facebook

BELOW:

The Mind Museum Science Curator

Maribel Garcia, Managing Director

Manny Blas II and Head of Opera ons

Chiqui Batac.

Tyrannosaurus Rex rulesat The Mind Museum.

13

MERALCO POWERCLUB

14

INDUSTRY TRENDS

for updates on new a rac ons and upcoming events.

In his work with IAAPA and PhilAAPA, Mamon surveys

amusements and a rac ons facili es worldwide. These

include US theme parks like Disney, Universal, and Six Flags,

family-run theme parks in Europe, aquariums and zoos, muse-

ums, and discovery/technology centers.

Thus inspired, he plans to open a new park zone for

Enchanted Kingdom’s favorite character, Eldar the Wizard.

Mamon is even more fi red up over the upcoming “Agila, The

Eksperience” indoor feature “that will impart our Filipino tradi-

ons, history and culture.”

Occupying more than 5,000 square meters, Agila off ers a

Philippine eagle’s-eye aerial view of the country from Batanes

to Jolo, projected on a 33-by-20-foot 2D screen.

“It’s one-of-a-kind in Southeast Asia,” envisions Mamon,

“and the single biggest fl ying theater in the world.”

The expansions are set to be in place well before Enchanted

Kingdom’s silver anniversary in 2020. “To increase our market

share, we must redevelop and expand,” Mamon underscores,

“and become an integrated-a rac on des na on.”

Interac on is the main concept behind DreamPlay, as chil-

dren enter the imagined worlds of DreamWorks.

“We are a premium player in an industry where there are

only a few compe tors,” states Lynch, “even within the region.”

DreamPlay’s integrated live and digital play spaces enable

children and adults to engage in crea ve storytelling and in-

nova ve educa onal play. Popular a rac ons include Dream

Studio, where children edit their very own digital animated

fi lms; 4D Theatre, which screens original DreamWorks fea-

tures; and Gingy’s Kitchen, where visitors whip up gingerbread

cookies.

Mascots of King Julien, Alex the Lion, Po, and Shrek and

Fiona engage with guests, while private birthday par es

and other occasions can be celebrated in themed func on

rooms. These feature 4-by-8-foot interac ve tables with

touch screens for mul player kiddie games and personal-

ized, printable gree ng cards.

Long-term benefi tsWorldwide studies prove that informal learning ac vi es

can create a posi ve, long-term impact on children, shares

The Mind Museum Science Curator Maribel Garcia.

“Educa on is necessarily a mix of formal and informal

learning, and the brain doesn’t diff eren ate between the

two,” she asserts. “Learning in an informal, relaxed environ-

ment lets children make mistakes without certain nega ve

consequences.”

Much of the informal learning ac vi es are collabora-

ons with ins tu ons such as the University of the Philip-

pines College of Fine Arts. The Mind Museum showcases

Filipino ar stry; its exhibits are locally designed and made.

Only a handful of the museum’s exhibits, like the T. Rex

display, are sourced from an overseas archeological facility.

That Filipinos spend so much on entertainment is no

surprise in this vigorous economy. But more than mindless

distrac on, people want experiences that can enrich minds,

young and old.

Lynch hopes this is what venues like DreamPlay can

achieve: a place that can “inspire children to develop posi-

ve values, build their strength of character and confi dence,

and prepare them to become visionaries and leaders of

tomorrow.”

P5,246.14B

P2,175.09B P572.69BP468.19B

P164.05B P126.13BP124.88B

P78.40B

Food and Non-AlcoholicBeverages

Housing, Water, Electricity, Gas and other fuels

Transport

Education Health

Recreation and CultureClothing and Footwear

2015 PhilippineHouseholdExpenditures

TOTAL:

(selected indices)

source: Philippine Statistics Authority

BY MALOU ROSAL

Here to Stay

COVER STORY

Why international hospitality brands choose

to make their home in the Philippines

It’s a sunny Friday morning, and the

Food Exchange Manila restaurant at

the Novotel Manila Araneta Center

is packed. Overfl owing, actually,

thanks to a pharmaceu cal conven on

it is hos ng; diners occupy tables set

up at the secondary lobby and at the

Gourmet Bar. Roaming about to help the

throng of guests are a unique feature of

Novotel: its Life Geniuses.

“Being a Novotel Life Genius,”

explains Bernd Schneider, general man-

ager of Novotel Manila Araneta Center,

“means we are trained to be our clients’

15

OCTOBER 2016

Bernd SchneiderGeneral ManagerNovotel Manila Araneta Center

16

MERALCO POWERCLUB

partners as they seek to achieve their goals.”

This singular philosophy drives all the hotel staff , whether

they work at the front desk or discreetly change the bed

sheets upstairs. “We are mo vated to understand what is in

the heart of our guests,” he con nues, “be it families coming

here for a relaxing weekend, or businessmen visi ng for an

interna onal conference, so that we an cipate and respond to

their requests.”

Whatever the composi on of the guest list, it’s clear from

the Friday morning crowd that Novotel Manila Araneta Center

is doing brisk business in a burgeoning hotels and restaurants

market.

Hot investments

The infl ux of new hotels refl ects the vigorous investor con-

fi dence enjoyed by the Philippines.

“Interna onal brands like Shangri-La, Hilton, Accor, Shera-

ton, Holiday Inn, Hya , Days Inn, and recently, Radisson Blu,

Jockey Club, and Best Western,” enumerates Board of Invest-

ments (BOI) Director Rafaelito Taruc, “have chosen the Philip-

pines because Manila, Cebu, Baguio, and Davao have been –

and s ll are – famous tourism gateways, and are therefore de

rigeur loca ons to be in.”

This preference is a ributed to several factors. The

Philippines has among the highest literacy rates in Asia, at

94.6 percent, and is the world’s third largest English-speaking

country. Located in the heart of the fastest-growing region,

it also serves as a gateway to a market of over 500 million

people in the Associa on of Southeast Asian Na ons.

To encourage further investments, Taruc adds: “Govern-

ment provides an income-tax holiday for four years to qualifi ed

investment priori es, plan-listed hotel or tourist accommoda-

on facili es, and some capital equipment, duty-free.”

Small wonder, then, that some P64.5 billion in investments

in hotels and restaurants were registered with the BOI from

2010 to 2016. Aside from previously men oned hotels, these

include pres gious interna onal hotel chains managing locally

owned establishments such as Conrad, Raffl es, Nobu, New

World, Sofi tel, and Mövenpick. Set to launch are other brands

like Okada Manila, Gen ng Grand Manila, and Wes n Manila.

Reigning at the hub

Aside from being the Philippines’s fi rst Novotel, the Araneta

Group’s fi rst hotel venture also holds the dis nc on of having

Quezon City’s largest room inventory to date: 401 rooms and

suites. Among these is a special accommoda on unoffi cially

referred to as “The Pia Wurtzbach Suite,” a er the current

Miss Universe, who frequently stays here. This spacious suite

The bright, airy lobby

at the Novotel Manila Araneta Center

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COVER STORY

17

allows her to entertain guests or host

media reporters for interviews, without

sacrifi cing comfort or privacy.

Novotel’s high standards of service

stretch back to 1967, when the hotel

chain was founded in Lille, France. With

over 430 hotels worldwide, Novotel is

the founding brand of the AccorHotels

group.

Renowned as the world’s largest

hotel-management company, AccorHo-

tels owns, operates, and franchises

4,000 hotels, resorts and residences, as

well as over 2,500 of the fi nest private

homes in 95 countries.

Its por olio includes luxury brands

Raffl es, Fairmont, Sofi tel Legend, SO

Sofi tel, Sofi tel, onefi nestay, MGallery

by Sofi tel, Pullman, and Swissôtel. Ac-

corHotels also off ers popular midscale

and bou que brands such as Novotel,

Mercure, Mama Shelter and Adagio;

economy brands including ibis, ibis

Styles, ibis budget; and the regional

brands Grand Mercure, The Sebel, and

hotelF1.

AccorHotels took over management

of the Philippine Plaza in 2006, and with

a US$10-million (P500-million) renova-

on, gave the landmark luxury hotel an

elegant French update with chic Filipino

touches. And despite the crop of new

hotels along the bay, the 609-room

Sofi tel Philippine Plaza con nues to be

a popular choice among foreign tourists

and Filipino stayca onists.

By October, the French brand will

have opened a Mercure hotel in partner-

ship with the Wynsum Leisure Group

at the Or gas central business district

with 150 rooms. Over the next two

years, three new proper es will open in

Metro Manila: Mercure Manila in Ermita,

M Gallery Manila (the former Admiral

Hotel), and Novotel Suites Manila at

the Acqua Private Residences in Manda-

luyong.

Work and play

With its extensive business and

leisure facili es, Novotel Manila Araneta

Center is ideal for corporate func ons

like conferences and exhibi ons because

of its proximity to major thoroughfares,

according to Schneider. He also notes

its easy access to events spaces like the

massive SMART Araneta Center, the

award-winning Gateway Mall and the

Kia Theatre (formerly the New Fron er

Theater).

“Quezon City is Metro Manila’s larg-

est municipality,” he adds, “with Araneta

Center being the hub of lifestyle, com-

merce, and culture in the area.”

Keeping Novotel humming smoothly

and its guests happy means having

stable, regular power; to run its systems

and equipment, and provide ameni-

es associated with a luxury business

hotel, like air condi oning, hot running

water, and WiFi. It worked closely with

the Manila Electric Co. (Meralco), even

before its doors fi rst opened, to ensure

its energy requirements are met.

Meralco’s involvement stretches back

long before construc on of Novotel

began. Five years ago, the distribu on

Cozy and comfy: a suite bedroom on the 22nd floor

OCTOBER 2016

18

MERALCO POWERCLUB

COVER STORY

The stylish Gourmet Bar

u lity began collabora ng with the

Araneta Group to revitalize the 35-

hectare Araneta Center. Meralco

upgraded power facili es in the area

to support the refurbishment of iconic

landmarks such as SMART Araneta Coli-

seum, Ali Mall, and Gateway Mall. It also

provided speedy energiza on of new

commercial and residen al high-

rises, and of Novotel.

Meralco also responded quickly to

the hotel’s electrical tripping problems

that the previous electrical contrac-

tor was unable to resolve. A single

walk-though audit by Mserv, Meralco’s

beyond-the-meter engineering services

subsidiary, immediately iden fi ed the

problem, and Novotel quickly received a

checklist of recommenda ons.

“Meralco is a valued partner in ensur-

ing the hotel’s smooth and consistent HOTEL PROJECTS

REGISTERED WITH THEBOARD OF INVESTMENTS

2010-July 2016 (in billion pesos)

source: Board of Investments

2010 2011 2012 2013 2014 2015 2016

Jan - July 2016

P3.73B

P12.88B

P11.43B

P12.11B

P15.23B

P3.66B

P5.44B

opera ons,” notes Schneider. “With

Meralco’s support, we are able to deliver

what our guests expect: consistent and

reliable services that ensure comfort

and convenience so they can truly enjoy

their stay, whether visi ng for a city

break with their loved ones, or a ending

an important business func on.”

Opening more doors

Riding on the country’s posi ve

investment climate, two other hotels

opened their doors to the public this

year: the Shangri-La at the Fort in

Taguig, and the Conrad Manila in Pasay.

Shangri-La Hotels and Resorts of

Hong Kong owns and manages 98 fi ve-

star deluxe hotels worldwide, with a

room inventory that exceeds 40,000. Its

fi rst property in the Philippines was the

19

The Shangri-La at The Fort,

Bonifacio Global City, Taguig

Conrad Manila at

the Mall of Asia Complex

‘The Philippines is an emerging market, and has always

been an exci ng and important des na on.’

- Harald Feurstein, general manager, Conrad Manila

Edsa Shangri-La Manila in 1992. This was followed by the Maka

Shangri-La, the Shangri-La Mactan Resort and Spa in Cebu,

Shangri-La Boracay Resort and Spa in Aklan, and Shangri-La at

The Fort in Taguig. Hotel Jen on Roxas Blvd., Pasay is also part of

the Shangri-La group.

At the launch of Shangri-La at The Fort, the hotel group’s top

execu ves arrived in full force, signalling their confi dence in the

country’s tourism and economic outlook.

“It’s been an exci ng journey, from conceptualiza on to

opening a new landmark at the Bonifacio Global City,” declared

John Rice, general manager of Shangri-La at The Fort. “Our hotel

clearly refl ects the uniqueness of the energe c community we

have se led in, and we look forward to welcoming guests with

our dis nc ve warmth and caring hospitality.”

Over by the Manila Bay, the US-based Hilton Worldwide

marks its return to the Philippines a er a fi ve-year hiatus, with

the opening of Conrad Manila.

Located within the Mall of Asia (MoA) Complex, Conrad Ma-

nila is adjacent to the Mall of Asia, the SMX Conven on

Center, the MoA Arena, and readily accessible to clusters of

BPOs and residen al buildings. The new hotel caters to the up-

scale business and leisure markets, with an emphasis on lifestyle

and entertainment, and its dis nc ve prow-like design makes it

an iconic structure by the bay.

This comeback is a clear expression of the Hilton group’s

belief in the country’s prospects. “The Philippines is an emerging

market, and has always been an exci ng and important des -

na on,” asserts Harald Feurstein, general manager of Conrad

Manila. “The country will con nue to strengthen its foothold as a

choice des na on for leisure and business travelers alike.”

He adds that this growth and strong performance are sig-

nifi cant diff eren ators among its Asian neighbors. “We hope to

contribute posi vely to the country’s progress,” he says. “We are

commi ed to grow the Conrad brand further.”

As Schneider observes his Life Geniuses bustling at Novotel

Manila Araneta Center, he muses: “This is indeed a great me for

the Araneta Center and the Philippine hospitality industry as a

whole. More eyes are turning to the Philippines as a key market

for mee ngs, events, incen ve trips, and conferences (MICE),

as well as leisure. These are exci ng mes for the country’s

economy.”

OCTOBER 2016

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MERALCO POWERCLUB

COMPANY PROFILE

Prac cal matches invented in the

19th century made it quicker to

kindle a fl ame, but safety and

reliability issues kept inventors

looking for be er alterna ves.

The earliest lighters, alarmingly fueled

by gunpowder, undoubtedly failed the

safety criterion. The inven on of a ny

fl int mechanism, coupled with the use of

naptha as a fuel, led to the crea on of

the fi rst true pocket lighters.

However, it was the shi to odorless

butane fuel that enabled the develop-

ment of the fi rst disposable Cricket

lighters in 1961, bringing convenience

not just to smokers but to housewives,

campers, and backyard barbecue chefs

worldwide.

From matches to CricketsMaking a reliable lighter, however, is

anything but simple. That’s why Swedish

Match Philippines Inc. (SMPI), the mak-

ers of Cricket disposable lighters, takes

every care and considera on to make

sure consumers get world-class products

that always click with every fl ick.

SMPI has been in the country since

1973; as its name suggests, it ini ally

produced matches. This business was

eventually sold off so the company could

focus on making disposable lighters for

the global market.

And what a market it is. Every year,

some 450 million Cricket lighters are

sold in more than 140 countries.

To feed this demand, says SMPI

Managing Director Leo Obias, the com-

pany relocated its produc on facili es

For thousands of years, making fire was such a chore that, across many cultures,

most households simply never put their fires out.

Swedish Match gives

people around the world

a spark of convenience.

Light It Up!

BY JING LEJANO

Leo ObiasManaging DirectorSwedish Match Philippines, Inc.

21

from Sta. Ana, Manila to the Laguna

Technopark in Biñan, Laguna in 2008.

He explains the move was necessary

not only to increase capacity, but also to

modernize opera ons.

SMPI’s principals originally con-

sidered other loca ons as a base of

opera ons in Asia. The Philippines

prevailed, Obias asserts, because of its

key advantages: a talented and train-

able workforce, cost-compe ve and

sustainable opera ons, and eff ec ve

and skillful management.

Since its transfer to Laguna, SMPI’s

produc on capacity has grown tremen-

dously. From 180 million units in 2008, it

now churns out about a million dispos-

able lighters every day, over 360 million

disposable lighters a year. Ninety-four

percent of the company’s output is for

export, of which 70 percent are sold in

Asia and 30 percent in Europe.

“If the demand requires it, we can go

24/7,” discloses Obias.

A light for every purposeDespite its roaring success, SMPI can

s ll do be er. It con nually fi ne-tunes

opera ons to consistently come up with

the best products at aff ordable prices.

Apart from making effi cient use of its

produc on space, it vigorously pursues

energy-conserva on measures to keep

costs down. In this area, it collaborates

with the Manila Electric Co. (Meralco) to

become more energy-effi cient.

Meralco conducts monitoring and

electrical systems surveys to recom-

mend cost-eff ec ve power quality

interven ons. As a result, SMPI

implemented power-saving measures,

replacing fl uorescent lights with LED

bulbs and switching to air-condi oning

units that employ inverter technol-

ogy and ozone-friendly R410A freon.

The company recently awarded Spec-

trum, Meralco’s solar energy solu ons

subsidiary, a contract to install a 100kW

solar-power system.

Obias praises Meralco for being

instrumental in the swi and speedy

transfer of SMPI to the Laguna Tech-

nopark, considered one of the most

successful factory transfers in the

mul na onal’s history. A cri cal issue to

SMPI’s opera ons is the safe handling of

the butane fuel used to fi ll every Cricket

lighter. To ensure a spark-free environ-

ment, Meralco oversaw the Laguna

plant’s retrofi ng, solving problems like

the erra c opera ons of fast line as-

sembly machines and injec on molding

machines through grounding system

improvements.

It isn’t just safety and effi ciency that

the company pursues; Obias wants

Cricket’s consumer base to grow beyond

smokers. “We want to broaden the mar-

ket,” he declares, “to make disposable

lighters a household need.”

To this end, SMPI is undertaking sev-

eral courses of ac on to do exactly that

here and abroad.

Pursuing innova onObias points out that the solu on lies

in constant innova on. Following the

inven on of its fi rst disposable Cricket

lighter, the company launched the fi rst

fi xed-fl ame lighter and the fi rst self-

ex nguishing nylon-body lighter in

1977. Then it introduced the fi rst child-

resistant lighter in 1992.

Cricket lighters are designed to be

rugged and virtually unbreakable, resis-

tant to both high and low temperatures.

Today, Cricket produces lighters

explicitly designed for u lity use, with

extended and fl exible nozzles to make it

easier and safer to light candles, stoves,

and grills. A wind-resistant u lity lighter

for outdoor use is already in the pipeline.

SMPI also works to enhance its

product presence and visibility in the

Philippine market. Cricket disposable

lighters come in a rainbow of colors and

en cing designs. Where once available

only in 24-hour convenience stores,

distribu on has now expanded to super-

markets and groceries. The SMPI team

is also making a move on neighborhood

sari-sari stores, providing retailers with

low-investment op ons to add Cricket

to their product inventory.

By simultaneously following all these

ini a ves, Obias hopes to nurture a

bigger market for his company’s prod-

ucts worldwide, enabling SMPI to create

more employment opportuni es for

Filipinos and contribute to the blazing

growth of the Philippine economy.

OCTOBER 2016

22

MERALCO POWERCLUB

COMPANY PROFILE

The National Museum gathers upthe heritage of the Filipino for

all the world to see.

BY DONDI LIMGENCO

The United Statesmilitary did not invent “shock and awe.” Preserving

a People’s

Treasures

Jeremy BarnsDirectorNa onal Museum

Juan Luna employed it overwhelm-

ingly when he painted Spoliarium

in 1884. A metaphor for the

cruelty of Spanish colonial rule,

the central image is a massive, muscular

gladiator being dragged into oblivion.

Even in death, Luna makes clear the

power and vitality of the man that was.

To ensure the oeuvre captured a en-

on, the ar st upsized his canvas: over

4 meters high and more than 7 meters

wide. Surely, the judges at the Exposición

Nacional de Bellas Artes in Madrid, Spain

23

Spoliarium

Oil on canvasJuan Luna

1884

OCTOBER 2016

didn’t just award Luna the gold medal for

this pain ng; they surrendered it.

Art, history, and science for the masses

Spoliarium con nues to shock and

awe hundreds of people every day. It’s

the fi rst major artwork encountered at

the Na onal Museum of Fine Arts at the

Old Legisla ve Building, domina ng the

former House of Representa ves Session

Hall in a way no poli cian ever could.

In his offi ce at the Fine Arts Museum,

part of the Na onal Museum Complex

in Rizal Park, Manila, Na onal Museum

Director Jeremy Barns declares: “The

Na onal Museum is eager to provide

visitors with a transforma ve experience,

by sharing all that is signifi cant, unique,

and emblema c of Philippine culture and

history.”

The Museum’s mission rests on the

principle that na onal unity and develop-

ment is anchored on a people’s sense of

pride in their iden ty, cultural heritage,

and natural patrimony.

“We’re not just about works of art,”

says Barns, “but also about science: the

archaeological and ethnographic ar facts,

and our specimens of fl ora and fauna,

rocks, minerals, and fossils.”

Na onwide, the Na onal Museum

operates 14 regional museums from Ilocos

Norte to Jolo, and more are in the pipeline.

A museum will open in Batanes this year;

while the Natural History Museum will

open next year, along with museums in

Iloilo and Bohol. Work has begun on a

new museum in Albay’s Cagsawa Ruins. A

new site museum at Palawan’s Tabon Cave

Complex, along with the Negros Island

Regional Museum in Dumaguete, also

received the go-ahead.

Powerful networksGiven the scope of its mandate, the

Museum regularly engages with govern-

ments and na onal ins tu ons across the

US, the UK, the EU, Russia, the Middle

East, Southeast Asia, China, South Korea,

Japan, and Australia.

Gallery XII at the Na onal Museum of

Fine Arts is dedicated to sculpture.

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MERALCO POWERCLUB

COMPANY PROFILE

cularly delighted to work with the Manila Electric Co. (Meralco),

whose assistance is vital to help the Museum achieve its goals.

Air condi oning is par cularly cri cal to the Museum’s

opera ons, and not just for visitor comfort. “We’ve substan ally

improved the environmental condi ons in our galleries and pub-

lic spaces, and, signifi cantly, our storage,” shares Barns. “Some of

our repository rooms are climate-controlled, 24/7.”

Meralco’s Energy Solu ons team conducted a walk-through

audit of the Museum’s electrical facili es. It recommended LED

replacements to halogen ligh ng, and ghter door alignments

and regular fi lter cleaning for greater air-condi oning effi ciency.

The Na onal Museum of Natural History structure – for-

merly the Department of Tourism building – was retrofi ed

from its founda ons and completely renovated. The contractors

fast-tracked the project, and Meralco worked quickly to energize

the building.

“We’re grateful to Meralco for being a reliable provider,” adds

Barns. “We don’t o en get brownouts and we feel that Meralco

gives priority to ins tu ons such as ours.”

Something for everyoneFelix Resurreccion Hidalgo could certainly use more apprecia-

on; his drama c pain ng, The Assassina on of Governor Busta-

mante, hangs across from Spoliarium. Both works are declared

Na onal Cultural Treasures, yet Hidalgo’s masterpiece gets

‘Sometimes it’s really

crowded, but it’s the ‘new

normal’ now.’

It hosts scholars from ins tutes like Har-

vard, the Smithsonian, the Muséum Na onal

d’Histoire Naturelle in Paris, and the Bri sh

Museum, among many others. “We also hope

to establish a new rela onship with the Museo

Nacional del Prado in Madrid and other Span-

ish ins tu ons soon,” Barns adds.

As part of the Department of Educa on,

the Na onal Museum works with local ins tu-

ons such as the University of the Philippines;

agencies such as the Na onal Commission

for Culture and the Arts, the Department of

Environment and Natural Resources and the

Department of Tourism; local governments,

dioceses, founda ons, and NGOs. Barns is par-

Head of a Lady

Concrete architectural cartouche

Vidal A. Tampincoca 1950 - 1960

The Assassina on of Governor Bustamante

Oil on canvasFelix Resurreccion Hidalgo

ca. 1884

th

o

ag

fo

En

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di

t

a

f

d

Resurrección

Oil on canvasHernando P. Ocampo1978

Sarimanok

Pounded brass Abdulmari Asia Imao

200925

fewer selfi es with the sizable

Thursday a ernoon crowd.

“It’s the same in places like

the Louvre, which is famous for

the Mona Lisa,” Barns observes.

The Museum features gal-

leries devoted to modern art,

to sculpture, and to Na onal

Ar sts like Fernando Amorsolo,

Vicente Manasala, Ang Kiukok,

HR Ocampo (Hernando Ruiz

Ocampo), and BenCab (Bene-

dicto Cabrera). “We’ve built up

our fi ne-arts galleries because our Na onal Collec on, which is

owned by the Filipino people, is second to none,” the director

notes.

“We are be er known, especially in Manila, for being an art

museum, and that’s been deliberate,” he explains. “Visual arts

seem to be most accessible to people, especially the youth, and

lets us introduce visitors to our archeological, ethnographic and

natural-history exhibits.”

The strategy seems to work, judging from the rising visitor

numbers.

Free for all“Some mes it’s really crowded, but it’s the ‘new normal’

now,” Barns observes. “People come in droves and interact with

the Museum, just as others do in similar ins tu ons across the

world.”

Visitor traffi c rose from 229,394 in 2013 and 261,680 in 2014,

to an astounding 534,820 in 2015. Hi ng a million by 2017 would

rank the Museum well among its regional peers.

The Museum’s new free-entrance policy might account for the

growing traffi c, but Barns believes the number, quality and variety

of the exhibits encourage people to return. Marke ng is minimal,

relying mostly on word-of-mouth and social media.

“People feel more relaxed,” Barns claims, “and try not to see

everything at once. They see something they like, and come back

with friends, family, or guests from abroad.”

Barns remains confi dent that the Na onal Museum has a place

in the lifestyle of today’s Filipino: “It’s just not true that Filipinos

don’t like museums. Filipinos love interes ng places they can go to

with their friends and family, to have experiences that are comfort-

able, convenient, memorable, and meaningful. We s ll have some

ways to go, but I think we’re very much on the right track.”

The First Mass in Limasawa

Oil on canvasCarlos V. Francisco

1965

OCTOBER 2016

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MERALCO POWERCLUB

SUBSIDIARY PROFILE

The summer of 2016 is on record as having been the hottest thus far. Temperatures ranged from 37 to 40 degrees Celsius

and strained air conditioners, which in turn placed available power supplies under stress. Last April 15, the National Grid

Corp. of the Philippines placed the Luzon grid under red alert.

MGen’s fi rst power plant breaks records

and gets a nod from PFI magazine.

A Long Path to Power

Heat-addled urbanites seeking

relief fl ocked to the beaches,

including those along the

coastal municipality of

Mauban, Quezon province. Located

some 157 kilometers (km) southeast of

Manila and 52 km east of Lucena City,

Mauban is popular for its beach resorts

and as a jump-off point for nearby

Cagbalete island. This municipality of

less than 70,000 residents will soon

be providing a diff erent form of relief,

BY MC SANTOS

thanks to the San Buenaventura Power

Ltd. Co. (SBPL) power plant.

Back in genera onIn 2010, the Manila Electric Co.

(Meralco) established a subsidiary,

Meralco PowerGen Corp. (MGen),

that puts the distribu on u lity back

in the power-genera on game. “We

were already in talks with [Egco

Senior Vice President for Interna onal

Development] John Palumbo at the fi rst

small offi ce of MGen,” recalls MGen

Chief Opera ng Offi cer and SBPL

President Aaron Domingo.

Three years later, MGen partnered

with New Growth B.V., a wholly owned

subsidiary of Thailand’s Electricity

Genera ng Public Co. Ltd. (Egco), to

form SBPL. MGen holds a 51-percent

stake in the venture, and New Growth

B.V., 49 percent. The venture

contracts SBPL to sell its en re net

capacity to Meralco under a 20-year

Ar st’s sketch of the SBPL power plant

27

and enable Meralco to provide its

customers with more stable and

reliable power. It will also allow more

compe ve pricing, since genera on

costs comprise 50 percent of each

electric bill.

The SBPL coal-fi red power project’s

scope prompted the pres gious

Thomson Reuters fi nance journal,

PFI (Project Finance Interna onal),

to name it “Asia-Pacifi c Power Deal

of the Year” for 2015. The award

primarily recognizes the achievement

of raising P42.15 billion for the

project, nego ated from a consor um

of Philippine fi nancial ins tu ons.

Marc Yorobe, senior vice president

of MGen, exults over how the award

acknowledges “a lot of innova ons in

fi nancing. For one, it’s the biggest all-

Philippine peso project fi nance facility

to date.”

The SBPL power project a racted

the country’s top banks to source and

manage the necessary funds: from

BDO Unibank Inc., China Banking

Corp., Metropolitan Bank and Trust

Co., Philippine Na onal Bank, and the

Rizal Commercial Banking Corp.

Korea’s Daelim Industrial Co., Ltd

and Japan’s Mitsubishi Corp. are the

project’s engineering, procurement,

Partners in power: MGen Assistant Vice

President David Evangelista, MGen Chief

Opera ng Offi cer and SBPL President Aaron

Domingo, SBPL General Manager Frank Thiel,

and MGen Senior Vice President Marc Yorobe

eagerly an cipate the comple on of the

460-megawa SBPL coal-fi red power plant

(facing page).

and construc on contractors.

Clean and plen ful power PFI also notes the importance of

the supercri cal boiler technology

u lized by SBPL, given the

environmental concerns regarding

coal. Supercri cal coal-fi red power

plants, which operate at higher

pressures and temperatures, yield

higher effi ciencies, and off er signifi cant

reduc ons in overall emissions over

the projected life of the plant. Given

that there are over 250 years’ worth of

supply, Thiel asserts that coal remains

an economically viable fuel of choice.

Domingo underscores how

this dovetails with MGen’s vision

of developing sustainable and

effi cient power plants, anchored on

environmental stewardship, while

producing compe vely priced and

reliable power.

It also means that Mauban’s other

industry – tourism – can remain

vibrant long a er the SBPL plant

begins opera ons. By then, the plant

will provide a reliable and stable power

supply to industrial and residen al

customers throughout Luzon, boost

produc vity and, hopefully, help make

summers more bearable.

power-supply agreement.

SBPL General Manager Frank Thiel

says, “We turned to MGen as a very

viable partner. MGen brings along

the power supply agreement, Egco

brings its exper se: it is a very good

marriage.”

It takes me, however, to build a

power plant. Domingo explains: “Once

you establish policy and strategy,

you set in mo on decisions that

lock down your op ons. You need to

see it through if it is already under

construc on or else you lose a lot of

money. You cannot just change your

mind.”

“Developing a large-scale power

sta on anywhere in the world can

require 10 to 12 years,” Thiel details.

“In the Philippines, it takes

165 permits to get a power plant

underway. You need to sa sfy a lot

of people; LGUs (local government

units), the Church. You have to have

the government permits in place. It

takes a lot of eff ort, a lot of pa ence.”

An award-winning dealConstruc on on the SBPL plant

began in December 2015. When it

comes on-line in 2019, it will generate

460 megawa s (MW) of electricity.

This is 36 percent of the 1,294 MW

combined capacity of the Sual Power

Sta on in Pangasinan, currently the

country’s largest power plant owned

by Japan’s TeaM Energy Corp.

The SBPL plant will provide a

substan al increase in the reserve

supply available to the Luzon grid

OCTOBER 2016

28

MERALCO POWERCLUB

In pre-Hispanic mes, travelers sailing to the island at the

doorstep of Malaysia would refer to it as “jaui-jaui,” Malay

for “far away.” Over me, the word evolved into “Tawi-

Tawi,” which eventually became the offi cial name of the

Philippines’s southernmost province.

Yet even in this century, Tawi-Tawi

con nues to be “far away.” The sea,

which has long served as a high-

way and a source of livelihood,

is also a barrier to the entry

of modern infrastructure

like electricity, hamper-

ing both economic

development and

educa on.

There is, how-

ever, no barrier to

ingenuity, determi-

na on, nor compas-

sion.

This year, Manila

Electric Co. (Meral-

co) Chairman Manuel

V. Pangilinan chose

a school in Sitangkai,

Tawi-Tawi to become the

170th off -grid school to be

energized via solar technol-

ogy. A mere 217 kilometers

from Sandakan, Sabah, in Malay-

sia’s Borneo, Sitangkai truly illustrates

the word “remote.”

Previously, the school used a generator set to

provide power for the administra ve offi ce, a small computer

laboratory, and seven classrooms for 922 students. The gen-

erator operated on funds donated by the parent-teacher asso-

cia on, which school principal Hadji Nadsi Malik says could be

used “to address problems such as overcrowding.” The school

also lacks a canteen, gym, library, and clinic.

Together with Meralco President and Chief Execu ve

Offi cer Oscar S. Reyes and One Meralco Founda on (OMF)

President Jeff rey Tarayao, Pangilinan met with

the Laud Sitangkai Annex benefi ciaries at

a turnover ceremony of the school’s

1-kilowa solar photovoltaic

system. The system will power

classroom lights, laptops and

mul media equipment.

The Sitangkai project

is one of many on-

going educa on advo-

cacy eff orts sup-

ported by Pangilinan

and OMF, Meralco’s

social-development

arm. To mark his

birthday last July

14, OMF held a

week-long volun-

teerism drive by

employees of Meralco

and its subsidiaries.

Using the chairman’s

ini als, OMF cheek-

ily named the campaign “7

Days of MVP” (Makabayan

Volunteerism Program).

In the fi rst and second weeks of

July, more than 1,000 employees re-

lessly visited 70 public schools within the Meralco

franchise areas, handing out back-to-school kits to overjoyed

kindergarten students. A fund-raising campaign back in May

raised about P1.3 million from the employees to fund these

kits, which consist of school supplies packed inside colorful

ONE MERALCO FOUNDATION

Solar power, school kits, and student lampsOMF’s Makabayan Volunteerism Programspreads back-to-school cheer

BY ESMI BARRERA

school bags.

Also distributed to students, this me

in 70 remote primary schools with no

access to electricity, are 7,000 much-

needed solar-powered lamps. This

sustains OMF’s response, kick-started

last December, to the “One Child, One

Lamp” (Ocol) campaign ini ated by

the Department of Educa on. Ocol

provides students in off -grid areas with

solar-powered lamps for home use (see

“A Beacon to Dispel the Gloom” in the

Power Club’s Q1 2016 issue).

These eff orts reaffi rm Meralco’s

commitment to inclusive growth and its

outreach to Filipinos beyond its fran-

chise areas.

Enrica Escada Elementary School students

receive school kits from OMF, consis ng of a

school bag, pencils, notebooks, pad paper,

crayons and scissors (facing page). This page,

from top: Clark Electric Distribu on Corp. Presi-

dent and CEO Ricardo V. Buencamino reads to

students; Laud Sitangkai school students show

their eagerness to learn; Meralco President and

CEO Oscar S. Reyes readies to distribute kits

at San Perfecto school.

OCTOBER 2016

29

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MERALCO POWERCLUB

EVENTS

Businesses exist to make a profi t and to drive the

economy, yet compe on demands more of

corpora ons, including registering savings.

In response to the ever-evolving business

landscape, the Manila Electric Co. (Meralco) demonstrated its

responsiveness to its customers’ needs with its re-engineered

Meralco Corporate Partners Power Up Forum series. The

distribu on u lity regularly conducts the forum to share

informa on and best prac ces with its partners on power

quality and effi ciency solu ons, product innova ons, pricing

programs, energy-industry updates, and clarifi ca ons on

regulatory policies that directly impact business.

Held at the Maka Shangri-La last July 22, the Power Up

Forum placed fi nance on center stage for the fi rst me. It

was well a ended by company presidents as well as fi nance

offi cers. This was followed by another Power Up Forum at

Fairmont Maka on September 2.

Meralco Vice President and Head of the Corporate

Business Group, Victor S. Genuino, welcomed the

par cipants and set out mutual goals to increase

compe veness, enhance ease of doing business between

Meralco and its business partners, and promote an

environment of effi ciency and progress in the long run.

“Meralco strives to be your ally in the enhancement of

growth, profi t, and produc vity for your enterprise,” he

remarked. “We are here to complement whatever you are

doing to obtain your bo om-line goals.”

The Forum kicked off with a presenta on that outlined

payments and refunds to be er orient the audience on the

various stages of their journey with Meralco, and clarify the

purpose of service deposits and processes to apply for a

refund.

Other topics discussed were Meralco’s energy-effi ciency

programs, like the long-running Peak/Off -Peak Rate, the

Customer Renewable Energy (RE) Compa bility Assessment,

and the Customer RE Asset Study, which calculates the

resources needed to connect that installa on to the

distribu on system. The applicability of the extended value-

added tax (eVAT) and the expanded withholding tax on

power payments were clarifi ed, as were the payment op ons

available under the Automa c Debit Arrangement.

The Forum wound up with a ques on and answer por on,

which s mulated interes ng discussions and the sharing of

real-world experiences.

Meralco Corporate Partners conducts the firstof its Power Up Finance Forum series

The Best-Shared Secrets

BY MC SANTOS

1 Meralco Electronics and Automo-

ve Team Leader Marvin Jovero and

Cathay Pacifi c Steel Corp. Manager for

Business Development Ed San banez,

with Meralco VP and Head, Corporate

Business Group Victor S. Genuino and

Meralco RM Ver Arevalo 2 Meralco RM

Khris an Valdez with San Miguel Pure

Foods Co. Finance Manager Florence

Pavon and Meralco Food and Beverage

Team Leader Gabriel Delfi n 3 Meralco

Head, Private Sector Rela onship

Management, Victor Risma, Texicon

Group VP for Finance and Comptroller

Pablito Bermudo, and Meralco RM Rick

Panes 4 Bloomberg Philippines Host

Quin n Pastrana with Victor S. Genuino

5 Philippine Diamond Hotel CFO Winada Effendi 6 Guru Property Develop-

ment Corp. VP and Operations Head, Victory Malls Group Roque Sendin and

Meralco Construction Team Leader Rene Sua 7 Meralco RM Mico Cornejo

with Morning Star Milling Corp. and Vita Realty Corp VP for Operations

Wellington Lim 8 Victor Risma with Meralco VP and Head, Marketing,

Customer Solutions and Product Development, Tony Valdez, Atlanta Industries

Division Head Robert Chan Jr., and Victor S. Genuino 31

1

3

6

4

5 7

8

OCTOBER 2016

2

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